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16 June 2011

PEI to study electricity supply

The Government of Prince Edward Island has appointed a five member commission to examine the province’s energy supply and pricing.

The commission — which includes Mike O'Brien, David Arsenault, Roger King, Gerald Morneau and Richard Hassard — will spend the next year looking at the future of P.E.I.'s electricity costs.

The province has some of the highest electricity rates in the country. Most of the power is purchased from outside resources — largely New Brunswick.

One potential source for the island is electricity from Muskrat Falls.

Speaking at a conference in Halifax on Tuesday, Bill Marshall, New Brunswick’s former electricity grid regulator said that Muskrat Falls could provide the Maritimes with a source of power cheaper than imports from New England. It could also allow the region to shut down environmentally dirty thermal plants.

What Marshall didn’t say is that this is only possible because Nalcor and the provincial government plan to sell Muskrat Falls power to consumers outside Newfoundland and Labrador below the cost of producing electricity at Muskrat Falls. Consumers inside the province will pay the full cost of production plus guaranteed profits to Nalcor, Emera and Newfoundland Power.

According to Premier Kathy Dunderdale, Muskrat Falls power will cost 14.3 cents per kilowatt hour to produce, assuming the project meets all current cost projections. That’s about four times the current wholesale cost of electricity in Ontario.